Hoel v. Old American County Mutual Fire Insurance Co.

Court of Appeals of Texas, First District

September 7, 2017

MELANIE HOEL, INDIVIDUALLY AND AS NEXT FRIEND OF HER MINOR CHILDREN Z.H. AND J.H., Appellantv.OLD AMERICAN COUNTY MUTUAL FIRE INSURANCE CO. AND AMWINS SPECIALTY AUTO, INC. D/B/A STATEWIDE CLAIMS SERVICE, Appellees

On
Appeal from the 269th District Court Harris County, Texas
Trial Court Case No. 2015-58515

Appellant
Melanie Hoel appeals from a final take-nothing summary
judgment entered in favor of appellees Old American County
Mutual Fire Insurance Co. and AMWINS Specialty Auto, Inc.
d/b/a Statewide Claims Service. Hoel filed the lawsuit to
recover the amount of a default judgment entered in her favor
against a driver insured by Old American. Because Old
American and Statewide were prejudiced as a matter of law by
the insured's failure to comply with the notice
provisions of his insurance policy, we affirm.

Background

Melanie
Hoel and her two minor children were involved in a car
accident with Manuel Martinez Salinas. At the time of the
accident, Salinas was listed as an insured driver on an
automobile insurance policy issued by Old American. Old
American had contracted with Statewide "to handle claims
made under insurance policies" it issued.

Hoel,
individually and as next friend for her children, sued
Salinas seeking damages for injuries sustained as a result of
the accident. Salinas did not answer the suit. The trial
court entered a default judgment against him in the amount of
$39, 443.15.

After
Hoel obtained the default judgment, she filed this suit
against Old American and Statewide as an "intended
beneficiary" of Salinas's auto insurance policy.
Hoel asserted breach of contract by Old American and
Statewide because they refused to pay the amount of the
judgment in the underlying lawsuit against Salinas.

After
answering the suit, Old American and Statewide moved for
traditional summary judgment, raising three arguments why
they should not be held liable under the insurance policy.
They asserted that they were not liable as a matter of law
because: (1) they were prejudiced by Salinas's failure to
comply with the notice and cooperation provisions of his
insurance policy; (2) under the policy, an actual trial,
rather than a default judgment, is necessary for them to be
liable; and (3) Statewide was not named as an insurer under
Salinas's policy. Old American and Statewide attached
evidence to their motion including a copy of the insurance
policy and an affidavit from a Statewide litigation adjuster
who handled the claim. In the affidavit, the adjuster
described his attempts to contact Salinas about the
underlying lawsuit. The adjuster averred that at no time did
Salinas "ever contact . . . Statewide about the claim or
underlying lawsuit, " "forward a copy of the suit
papers for the underlying suit to Statewide, "
"request a defense in the underlying lawsuit, " or
"cooperate in the defense of the underlying
lawsuit."

Hoel
filed a response to the motion for summary judgment. She
argued that Old American and Statewide were not prejudiced by
Salinas's failure to notify them of the underlying
lawsuit or the default judgment. Hoel attached numerous
exhibits to her response including several letters between
Statewide and her counsel. In these letters, Hoel's
counsel informed Old American and Statewide that he was
representing her and her children with respect to the
accident. The letters demonstrated settlement negotiations
that took place between Statewide and Hoel prior to her
filing suit against Salinas. In addition, Hoel attached
copies of faxes she sent to Statewide before and during the
underlying lawsuit, notifying it that she had filed suit and
intended to seek a default judgment against Salinas. These
faxes included copies of the petition, motion for default
judgment, and the final judgment against Salinas. Hoel also
attached a letter she received from Statewide which indicated
that it was denying coverage to Salinas because he had failed
to notify it of the lawsuit.

Without
specifying the grounds upon which it relied, the trial court
granted Old American and Statewide's motion for summary
judgment. Hoel appealed.

Analysis

On
appeal, Hoel argues that the trial court erred by granting
summary judgment because Old American and Statewide could not
establish that they were prejudiced as a matter of law based
on Salinas's failure to comply with the notice provisions
of his insurance policy. Hoel does not dispute that Salinas
failed to give the required notice or cooperate with Old
American and Statewide during the underlying suit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
prevail on a traditional Rule 166a(c) summary-judgment
motion, a movant must prove that there is no genuine issue
regarding any material fact and that it is entitled to
judgment as a matter of law. Tex.R.Civ.P. 166a(c); Little
v.Tex. Dep&#39;t of Criminal Justice, 148
S.W.3d 374, 381 (Tex. 2004). A defendant may prevail by
traditional summary judgment if it conclusively negates at
least one essential element of a plaintiff&#39;s cause of
action. IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc.
v. Mason, 143 S.W.3d 794, 798 (Tex. 2004). A movant
seeking traditional summary judgment on an affirmative
defense has the initial burden of establishing entitlement to
judgment as a matter of law by conclusively establishing each
element of its affirmative defense. See Chau v.
Riddle, 254 S.W.3d 453, 455 (Tex. ...

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